Is the Party Over for These Mortgage REITs?

Mortgage real estate investment trusts have been a favorite among investors seeking some of the highest-paying dividends in the investment world. But is the dividend party about to end?

Anwar Elgonemy is the author of the new book Skin in the Game: The Past, Present, and Future of Real Estate Investments in America. In part one of my interview, he explained two hidden threats to mortgage REITs and shared why he believes Capstead Mortgage, Chimera Investment Corp., and PennyMac Mortgage are undervalued.

In this audio segment, he analyzes the biggest misconception about mortgage REITs as well as the three primary reasons for investors to own them. After identifying two mortgage REITs he believes are overvalued (including one with a "heart-burning valuation"), Elgonemy shares the one thing investors should always keep in mind about mortgage REITs and their huge dividends.

Looking for dividend-paying stocks trading at bargain prices? Check out The Motley Fool's free report "2 Dirt-Cheap Stocks With HUGE Dividends." You can be among the first to get analysis of a market leader in payment systems and a high-yielding energy company by accessing this just-released report. Simply click here -- it's free.

Chris Hill does not own shares of any of the companies mentioned. The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Annaly Capital Management. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (3) | Recommend This Article (31)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 23, 2012, at 5:25 PM, LuizDL wrote:

    Part two of this interview is fantastic! I especially liked Anwar Elgonemy's comments about the misconceptions of investing in REITs. Very wise and prudent responses.

  • Report this Comment On April 23, 2012, at 5:32 PM, IvanesivecW wrote:

    I agree with LuizDL. I really liked his responses to Chris Hill's tough questions. Anwar Elgonemy is a true real estate expert. I look forward to more interviews with him!

  • Report this Comment On April 25, 2012, at 12:12 PM, JWL007 wrote:

    Great interview. Love his answer, 3 points, to why investors should look to invest in REITs. Very insightful comments. I agree completely that REITs are not for regular trading. Recently saw on Sacramento Bee that Mr. Elgonemy's book is on top of Robert Rubin's (former US Sec of Treasury) reading list. Gotta get his book.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1868488, ~/Articles/ArticleHandler.aspx, 5/27/2015 6:19:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!